1.        Vision

UCM’s Economics faculty is dedicated to building a program that reflects the unique opportunities and standards of excellence of the newest campus of the world’s best public university system.  This means a modern approach to the field.  Paul Krugman, an Economics Nobel Laureate, writes that old world Economics exalted “mathematical prowess… and… turned a blind eye to the limitations of human rationality… to the problems of institutions that run amok; to the imperfections of markets… and to the dangers created when regulators don’t believe in regulation.” [1]  Building an Economics group for the 21^st century means facing up to the challenges posed by Krugman.  It means developing and applying the best Economic methods and thinking to address real world problems.  A focus on real world economics has already become a hallmark of UCM with faculty research addressing questions like: How well are organ transplants allocated?  Why do people behave dishonestly?  Can universities power local economic growth?  How do off-shoring and immigration affect domestic workers?

In a small campus like UCM, we in Economics aim for focused excellence.  We seek international distinction for excellence in applied economics and quantitative methods generally, with a particular research emphasis on three complementary areas of economic study:

1)      Health economics and management, including impacts of alternative health systems, policies and behaviors on incentives, costs and health outcomes; determinants of individual health behaviors; determinants of health disparities in underserved populations[KS1] ; economics of ageing.

2)      Regional development and economic geography, including determinants and impacts of migration and trade, regional growth and urban planning, local governance, technology.

3)      Environmental and natural resource economics and management, including the economics of agricultural and food markets, corporate environmentalism, control of global and local pollutants, energy and natural resource markets and production.

We aim to fill a niche in the market for ideas, students, and graduates by focusing on these themes, each of which is growing in importance in the broad community of policy choice, scholastic inquiry, and demands for Ph.D. talent.  Our chosen specialties are also particularly appropriate to campus-wide themes, which make them uniquely fertile ground for inter-disciplinary collaboration. 

2.        Current Situation and Prospects

Faculty.  We have successfully recruited three new talented faculty to the program in AY 2013-2014, one senior and two junior, all starting January 1, 2014.  Our combined new faculty of five reflects research strength in environmental economics (Kurt Schnier and Rob Innes), economic geography and international trade (Alex Whalley, Rowena Gray, and Greg Wright), and health economics (Kurt Schnier).  Our current outlook for recruitment has never been better for a variety of reasons, including the scholastic strength of our current team, the unique academic experience in UCM’s interdisciplinary environment, and the positive, enthusiastic, and cohesive approach of our group.

Undergraduate Programs.  Economics is one of the most popular majors throughout the University   of California system and across the nation.  For example, Economics is the second most popular major in the College   of Letters and Science at UC Berkeley; indeed, when combining Economics with two other economics majors (Environmental Economics and Policy, and Political Economy), Economics is the most preferred subject of incoming undergraduates at the campus.[2]  Similarly, at UCLA Economics and Business Economics together represent the most popular major subject on the campus, capturing 7 percent of new students.[3] Beyond the high demand for the subject, Economics represents a core discipline for any University, and particularly for world-class research institutions to which UCM compares itself. 

Economics at UCM is responsible for two large undergraduate majors.  The first is the Economics degree, which we are in the process of converting to a Bachelor of Science (from the current Bachelor of Arts).  The second is the Management degree, which we are in the process of renaming and revising to a Management & Business Economics major.  Together, the two current degrees (Economics and Management) have approximately 500 majors.  We anticipate substantial growth in these majors over the coming years with the leadership of both faculty and lecture staff.  In addition, as word of the successes of program graduates (in graduate school at UCLA, UCSD, Notre Dame, etc.;  in private sector firms at Ameriprise Financial, San Jose Giants, Vista Solar, H&R Block, Westat, etc. and public service House of Representatives staff, Census Bureau, Washington DC Mayor’s office, etc.) percolates across the campus community we expect further enrollment growth.

Graduate Program.  A central element of success for any academic unit at aUniversity ofCalifornia campus is a thriving graduate program that trains students to take leadership positions in Academia, Government and the private sector.  A Ph.D. program is vital to our program’s development, enhancing research outcomes, external funding, program reputation, faculty recruitment, and TA support and quality.  We plan to start the Economics Ph.D. program in Fall 2015.  We will offer a complete first-year program that includes core course sequences in Microeconomic Theory and Quantitative Methods.  A third series will be required that includes a course in Macroeconomic Theory and Research Methods and Themes.  The second and third years will be occupied with both field courses and preliminary research toward the dissertation.  We will offer a select set of field courses, including fields in health economics, environmental economics, advanced econometrics, and economic geography / trade.  Students can selectively enroll in additional fields at UC Davis during their second year.  We anticipate Ph.D. program enrollments of 25-35 by 2020, supported by TA’ships required to staff our undergraduate sections (see attachment).  Additional enrollments will be possible with grant, endowment and private funding.

University Agreement on Management.  Under a University-wide agreement, Economics and Management faculty are in the process of implementing a strategy for Management-related education at UCM.  Over the short to medium run, this strategy involves Economics taking the lead on the undergraduate Management program (to be renamed Management & Business Economics, MBE); MIST initiating a Masters program; collaboration in program planning; and an equal split of Management-related faculty FTE.  The long-run aim is to merge these programs into aSchool ofManagement and Economics (see separate proposal). 

3.  The Plan and Resource Requirements

Faculty.  The central challenge faced by our program is to build quickly to critical mass.  The importance of sufficient faculty hiring commitments in Economics in the short run cannot be understated.  Given our current depleted faculty ranks, this commitment is vital to gaining distinction in research, developing a Ph.D. program, attracting and retaining world class scholars, and serving educational demands in Economics and Management.  Our plan is to add 2-3 faculty per year, for an anticipated faculty of 21-23 in AY 20-21.  Almost any criterion one cares to name will dictate at least this path of growth for Economics.  One criterion would be distinction in a field that is central to every top rate University in the world.  Another would be the opportunity for distinction in the key areas of endeavor for which we are already building strength.  Another would be the size and scope of programs.  A related criterion would be the share of the University community for which Economics is responsible.  For example, Economics will be responsible for 8 to 10 percent of UCM’s undergraduate program, and 3 to 5 percent of its anticipated graduate program.  In an overall faculty of 400 as of AY 20-21, a six percent share would be 24 faculty.  Alternately, if one goes by standard (19 students to one) ratios, a faculty of roughly 44 faculty would be justified.  Economics faculty numbers with planned hiring are: AY 14-15: 8 faculty FTE (authorized), AY 15-16: 11 FTE, AY 16-17: 13 FTE, AY 17-18: 16 FTE, AY 18-19: 18 FTE, AY 19-20: 20-21 FTE, and AY 20-21: 22-23 FTE.  Faculty hiring in Economics will prioritize our three thematic fields and economic methods (econometrics, experimental, and theory), while complementing our Management-related educational offerings in Marketing / Industrial Organization, Strategy, and quantitative skills.

Lecturers.  Between 10 and 11 FTE lecturers will be needed throughout this period to support teaching programs.  The “mathematics” of our long-run situation demands 11 FTE lecture staff (details attached).  Among these lecturers, we will be proposing four to six LPSOE positions over the coming years, adding one per year.  The LPSOE’s are vital to program development, advising, and accommodating anticipated growth in the programs.  Of equal importance are unit 18 lecturers who will make up the balance. 

Other Resources.  Economics is not a resource intensive field of study; therefore, we can generate a high return per dollar spent of the University’s investment.  We require office space for our staff, and likely will need to share experimental lab space with other disciplines, but require little more.  On the resource supply side, our current faculty have been successful in obtaining resources from such prestigious granting agencies as the National Science Foundation and the National Institutes of Health, despite scarce grant money for our field.  Our focus on Health and the Environment promises continued success in grant funding.   In addition, Economics is often successful in securing endowment resources for academic programs. Leveraging endowment resources at UCM, particularly with the undergraduate Business program, we anticipate successful efforts to endow chairs, scholarship funds, and perhaps selected programs in coming years. 

Cross-campus / Inter-Disciplinary Linkages.  We will link across campus in our thematic areas:

▪In health economics, we will be working closely with Public Health, particularly in their Health Services emphasis area.  Our joint plan is for Economics to hire 3 additional faculty in the health economics area over the next three years, and for Public Health to hire 3 health economists for their Health Services programs.  This strategy enables the University to build critical mass and distinction in the Health Economics area by exploiting inter-unit synergies.

▪In regional development, we will be working in concert with a newBlumCenterfor Community Development at UCM.  In addition, our current and anticipated strength in the immigration field will complement the research emphasis of our sister program in Sociology. 

▪In environmental and resource economics, we plan to join with scholars in other social sciences (notably including Sociology and History) to build an inter-disciplinary research center on the Social Science of the Environment.  Our graduate program will also link with current programs in Environmental Sciences to offer field courses in Environmental Policy. 

Short and Long Run Administration.  The Economics group will collaborate with our SoE colleagues in MIST (Management of Innovation, Sustainability, and Technology) in the short and long run.  In the short run, we will help as needed in planning and delivery of Masters-level education by MIST, and collaborate on undergraduate Management program planning.  In the long run, MIST and Economics aim to integrate into aSchool ofManagement and Economics (see related proposal).    

4.  Impact Metrics

The central mission of UCM is to build a world-leading research university that stands shoulder to shoulder with our sister campuses.  Success in Economics can be judged by three metrics: Publication records, Ph.D. program recruitment and placement, and undergraduate program delivery.  We are currently working to improve our large undergraduate program, to launch a Ph.D. program, and recruit stellar scholars.   Current UCM faculty have been very successful in publishing in the top KMS (2003)[4] and RePEc[5] journals, such as American Economic Review, Journal of Econometrics, Journal of Political Economy, Quarterly Journal of Economics, Review of Economics and Statistics, and top Economics field journals.  Executing the targeted excellence strategy of this plan will build a truly distinguished Economics department on a path to national ranking in coming years.

Authors:  Robert Innes (Economics), Kurt Schnier (Economics), Alex Whalley (Economics)

Affiliates/Collaborators:  Paul Brown (Public Health), Yihsu Chen (SoE), Paul Maglio (Management), Erik Rolland (Management), Nella VanDyke (Sociology)